Test the ROCK
Before you put your weight on it
-Kris Langham
Welcome back to the Rambling Mind Newsletter. This is your Market Update
This newsletter is 1,440 words and a 7 min read
YTD Markets
The year started really hot in the market but that was due to investors being overly optimistic and ignoring reality. Well, the reality is slowly setting in and the markets are beginning to reflect the reality that inflation is not gone and interest rates are staying high for a long while.
Tale of the Tape
Economy
Meta announced a new service that will allow users to purchase a blue verification badge for their accounts. It is called Meta Verified.
Details: It is very similar to Twitter's paid verification system but unlike Twitter, there are safeguards in place.
It will cost $12 on the web and $15 on mobile.
You will have to submit a government-issued ID to confirm your identity
You'll get higher visibility and reach on the platform and increased customer support
Takeaway: Well people really like being a part of anything exclusive. Zuck is banking on people being willing to pay for that exclusivity. Creating a new subscription revenue stream to help with the damage Apple's Privacy changes have done to its ads business.
It will also help Meta tackle its fake and spam account or at least that was the announcement.
🛍🛒Big Takeaway: This changes everything for social media. It is no longer how you connect with people but rather how you get sold to. Although we all knew this before, it truly crystallizes the fact that social media is for professional content creators to create entertainment and sell ads and products to us in the process. This has been a long time coming.
My Takeaway: If you want to connect with your friends, you need to take them off of social media. Time to return to the days of old and actually call or text or have a group chat. Your circle will have to become a lot smaller, which might actually be a good thing. Even as a content creator, I will use social media even less cause the spam is about to be even greater.
Earnings
Home Depot sounded the alarm on consumer spending on their earnings release. It led every stock lower after its report on Tuesday.
🔢By The Numbers: Revenue grew as much as my height changing over the last 5 years. In other words, it didn't grow.
Customer Transactions declined by 6% in the quarter
They expect NO GROWTH in the year 2023
Takeaway: Home Depot tends to be a bell weather for the consumer economy. When people feel great about their financial situation, they tend to spend more on home improvement projects. Well, that is not happening this year. With inflation remaining stubborn and interest rates staying high, the ability for consumers to take on the extra expenditure is gone.
My Takeaway: Last Week's Newsletter was called "Slowly then Suddenly". The reality of the situation we are in is slowly coming into investors’ view. Nothing happens immediately, things usually snowball their way into disasters. I do not know if we are heading for a recession. However, every forward-looking economic signal is pointing toward a recession. It forces me to consider that things may not be great for the entire year. I hope I am wrong about this.
Although Walmart had a great holiday shopping quarter, it followed Home Depot and poured even more cold water all over the Stock Market.
🔢By The Numbers: Revenue and Income saw a nice increase from 2021.
Revenue increased by 7% to $164 Billion.
Walmart is one of two companies to make over $100 Billion every quarter of the year. Amazon is the other company
Income increased to $6.28 Billion
Margins are so tight for Walmart
However, they are predicting for 2023 to be much worse
Expect same-store sales to be flat or increase only by 2%
John David Rainey, the CFO said, "The consumer is still very pressured. And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.”
Takeaway: See Above. Things are getting tight for consumers.
Stats of the Week
Who said Disney does not make major hits anymore?
Ant-man and the Wasp: Quantumania made over $104 million at the box office over its release weekend.
This shows we are by no means done with superhero movies
Also, Disney is 👑 of content. This is the 31st consecutive Marvel movie to hit #1 at the box office.
The price a first generation iPhone sold for.
Before you get excited and try to sell yours, you probably won't get as much for it.
This iPhone was in its original package and still sealed
As we all know life has completely changed since Steve Jobs walked on stage with that phone and completely changed how we do anything.
Percentage of companies that will be switching permanently to a 4 day work week after a six-month study in the UK
The Study included 61 companies and over 2900 workers
Companies reported increased productivity and performance and reduced employee burnout
I need to send this report to my boss
Looking Ahead
March is here. Spring should be here but with all the Blizzards recently. Who knows what to expect anymore?
Sports I Love
Silverware FINALLY
It's been so long since Man U has lifted a trophy. But no more!! After beating Barcelona on Thursday in the second leg of the Europa Championships. Man U faced Newcastle in the FA Cup final and smashed them. Sure this is not the Premier League trophy but it is definitely more than we have had in a LONG time.
Right now, it is so good to be a Man U fan.
Sports I Don't Love
Baseball Finally Making A Change
In the new Baseball season, Pitch Clocks will be used. The aim is to speed up the pace of the game and remove all the boring tedious parts of the game. Baseball is notorious for being the most boring sporting event to watch because it just takes too long for no real reason. Adding the Pitch Clock should help bring some level of excitement back into the game
Extras
On Monday, the Supreme Court began listening to hearings for a case against Google. The lawsuit states Google should be held liable for a terrorist attack that killed a young lady. The family members of the lady say YouTube's algorithm recommendations helped recruit members for ISIS
Why is This Important?: No Internet company is held responsible for what is posted on their platform because of something called Section 230. Section 230 states:
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
This is the reason we have the internet we have today. It allowed companies to operate without fear of being sued around every corner for things people shared using their platform.
Takeaway: If the Supreme Court chooses to make a ruling that changes Section 230. The internet as we know it will never be the same. However, it seems the Supreme Court Justices do not want to make any major changes. We will have to wait until June to see how this plays out.
Two weeks ago Netflix announced a golf documentary series called "Full Swing". You probably saw a commercial for it during the Super Bowl. Last Wednesday, Netflix announced a new NFL documentary series called "Quarterback". The series followed 3 Quarterbacks during the 2022 Season, Patrick Mahomes, Kirk Cousins, and Marcus Mariota. Talk about luck of the draw, with Mahomes winning the Super Bowl. This is gonna be a great watch for sure.
Netflix has gone in a completely different direction from other streaming companies. Rather than paying massive dollars to stream live sports. Netflix instead has chosen to partner with various sports leagues to show what happens after and before sports matches or games. If Netflix's F1 Racing series, "Drive to Survive", is any sign of what is to come. This series will be a massive hit. For golf, it might help invite a much younger crowd to the sport
*I am a tiny shareholder in this company.